Computer fiasco firm wins new contract

The US giant blamed for the biggest computer crash in government history has approval to extend a £450m Child Support Agency contract.

The work and pensions secretary, Alan Johnson, is permitting EDS to jointly manage a CSA claims processing centre, despite wide criticism of technology installed by the Texas-based corporation. A confidential EDS report seen by the Guardian details how it is to co-run the CSA complex in Accrington, covering north-west England and Wales.

EDS was "fined" £12.1m for CSA computer faults partly responsible for seven in eight parents getting incorrect payments. In November 80,000 of Mr Johnson's department's 100,000 computers, operated by EDS and Microsoft, went down in what was described as the public sector's most extensive failure. Accrington is one of a dozen centres nationwide, and EDS hopes it will produce "practices that can be deployed more widely across the CSA for improving operational productivity".

The CSA's chief executive, Doug Smith, has agreed to retire early after the complaints. The CSA minister, Patricia Hollis, said last year: "The agency's problems start and end with the computer system."

Mark Serwotka, the general secretary of the PCS civil service union, said: "It beggars belief the agency is rewarding a company that has failed to deliver ... The move is a major shift from EDS's core work, and raises serious questions about involvement of the private sec tor in delivery and management of public services."

The department said: "We work closely with EDS on improving the effectiveness of their computer service ... some of their managers will, for three months, work alongside the agency's in Accrington, hopefully offering constructive suggestions on how our management of the process can be improved."